Haemonetics Corp (HAE) Reports Revenue Growth and Updates Fiscal 2024 Guidance
Revenue Growth: Haemonetics Corp (NYSE:HAE) reported a 10% increase in revenue to $336 million for Q3 2024 and a 12% increase year-to-date.
Earnings Per Share: Q3 diluted EPS was $0.61, with adjusted EPS climbing to $1.04.
Operational Cash Flow: The company experienced a cash outflow from operating activities of $1 million in Q3, but maintains a positive year-to-date cash flow of $118 million.
Adjusted Operating Margin: Improved to 21.8%, up 250 basis points from the same period last year.
Guidance Update: Haemonetics updated its fiscal 2024 guidance, projecting 10-12% revenue growth and adjusted EPS of $3.90 - $4.00.
On February 8, 2024, Haemonetics Corp (NYSE:HAE) released its 8-K filing, detailing financial results for the third quarter and year-to-date fiscal 2024, which ended December 30, 2023. The company, a leader in medical products for blood and plasma collection, surgical suite, and hospital transfusion services, continues to focus on its plasma and hospital segments, which show robust growth potential.
Performance Highlights and Challenges
Haemonetics reported a solid 10% increase in third-quarter revenue to $336 million and a 12% increase year-to-date to $966 million. The company's plasma segment saw an 8.4% growth, while the hospital segment surged by 23.9%. However, the blood center segment experienced a decline of 3.9%. The company's gross margin improved slightly to 52.9% in Q3 FY2024 from 52.0% in Q3 FY2023, driven by volume, mix, and price, despite the impact of portfolio rationalization and increased depreciation expenses.
Operating expenses as a percentage of revenue increased to 39.2%, up from 37.8% in the same quarter last year, primarily due to investments in growth, transaction costs, and digital transformation. Despite these challenges, Haemonetics achieved an operating margin of 13.7%, although slightly down from 14.2% in the previous year's quarter.
Financial Achievements and Industry Significance
The adjusted operating margin for Q3 FY2024 stood at 21.8%, a notable increase from the previous year, highlighting the company's efficiency in managing its operations amidst growth investments. The adjusted net income rose by 22.3% to $53.3 million, and adjusted earnings per diluted share increased by 22.4% to $1.04, reflecting the company's ability to enhance profitability in the competitive medical devices and instruments industry.
Haemonetics' balance sheet shows a cash position of $194.0 million as of December 30, 2023, despite a decrease due to the acquisition of OpSens, Inc. The company's cash flow faced headwinds, with a $20.3 million free cash outflow before restructuring and related costs for the quarter, attributed to the timing of customer payments and increased inventory balances.
Updated Fiscal 2024 Guidance and Analyst Commentary
CEO Chris Simon commented on the company's performance, stating:
"We continue to deliver increased revenue and margins, strengthen market leadership and increase impact through portfolio evolution, operational excellence and resource allocation. Outperformance is funding additional opportunities for accelerated growth and diversification like the OpSens acquisition. We are well-positioned and gaining momentum to achieve long-term transformational growth."
Reflecting confidence in its strategic direction, Haemonetics updated its fiscal 2024 guidance, projecting total revenue growth of 10-12%, with organic growth also in the 10-12% range. The company reaffirmed its adjusted operating margin guidance of around 21% and raised its adjusted EPS guidance to $3.90 - $4.00. Free cash flow before restructuring and related costs is now expected to be between $160 million and $180 million.
Haemonetics' performance and updated guidance signal a strong position in the medical devices sector, with a focus on growth and operational excellence. The company's strategic acquisitions and investments in digital transformation are set to bolster its market leadership and drive long-term growth, making it a company to watch for value investors interested in the healthcare space.
Explore the complete 8-K earnings release (here) from Haemonetics Corp for further details.
This article first appeared on GuruFocus.
